AUD/USD eyes 0.7800 as bulls fight amid upbeat market mood
- AUD/USD regains upside momentum, extending recovery moves from 0.7725, after Thursday’s negative performance.
- Capitol Hill attack makes US President Trump despicable among certain Congress members, Democrats demand immediate impeachment.
- Joe Biden is officially the winner of US election 2020, traders await formal swearing-in and stimulus announcements.
- Virus updates, US politics can entertain traders amid a light calendar.
AUD/USD reverses Thursday’s losses while picking up the bids near 0.7770-75 during the early Friday morning in Asia. The aussie pair had to bear the burden of political drama in the US, which mainly triggered the US dollar run-up while snapping the two-day uptrend the previous day. However, hopes of the American stimulus propelled Wall Street benchmarks by the end of the day and favored the Aussie bull’s return.
Trump cleared the path for Democrats…
US President Donald Trump is witnessing the heat of political turmoil in Capitol Hill after allegedly inciting supporters to roil the American policymaking. Not only the Democratic members like House Speaker Nancy Pelosi and Leader Chuck Schumer who asks for the immediate impeachment of Trump but there are some Republicans who also back the move.
This first of its kind incident in the US helps Democratic Party to firm up its control in the Senate, in addition to winning in Georgia, which in turn keeps markets directed towards the much-awaited coronavirus (COVID-19) paycheck of the aid of $2,000.
Elsewhere, China tried its hands to highlight the unacceptable behavior of the US President while also warning America to stay out of their internal matters. Though, nothing could lead markets to forget that they’re not cooperating in covid tracing investigations, as earlier indicated by the World Health Organization (WHO).
It should be noted that the US noted the record virus cases and a leak from the UK’s National Health Services (NHS), per HSJ, suggests more flooding of the COVID-19 cases in London. However, vaccinations are keeping the markets hopeful.
On the data front, which was mostly ignored, Aussie Trade Balance for November deteriorated and Building Permits improved while the US ISM Services PMI for December also weakened.
Amid these plays, Wall Street marked another positive by the end of Thursday while the US 10-year Treasury yields stay above 1.0%, up 4..3 basis points (bps) to 1.085% by press time.
Moving on, a lack of major data/events will keep markets directed to the US politics and Sino-American tension, not to forget the covid news, for fresh impulse. Given the more likelihood of American stimulus announcement from Democrats, not the official one as they can’t now, risks may remain positive and help AUD/USD in turn.
Technical analysis
A 14-day-old ascending trend line joins 10-day SMA, around 0.7695-90, to restrict short-term AUD/USD downside. Alternatively, the 0.7800 offers an immediate upside barrier ahead of eyeing the recent top of 0.7820 and March 2018 peak surrounding 0.7900.